Great piece by Mat Honan at Gizmodo on how Yahoo! killed Flickr. There are many reasons but this one really highlighted one of the challenges companies face when buying an upstart:

“And so when Flickr hit the ground at Yahoo it was crushed with engineering and service requirements it had to meet as per demands of the acquisition integration team. Those were a drain on resources, human and financial. Even though many of the resources came from Yahoo, they were debited against Flickr. This created an untenable cycle that actively hampered innovation.”

So basically, it killed everything that made Flickr special. That’s what happens to a lot of properties and I’m sure that Google, Facebook, Apple, and Microsoft are no different. Sometimes, the only way to extract value from an acquisition is to let it do what made it attractive in the first place.

“Because Flickr wasn’t as profitable as some of the other bigger properties, like Yahoo Mail or Yahoo Sports, it wasn’t given the resources that were dedicated to other products. That meant it had to spend its resources on integration, rather than innovation. Which made it harder to attract new users, which meant it couldn’t make as much money, which meant (full circle) it didn’t get more resources. And so it goes.

As a result of being resource-starved, Flickr quit planting the anchors it needed to climb ever higher. It missed the boat on local, on real time, on mobile, and even ultimately on social-the field it pioneered. And so, it never became the Flickr of video; YouTube snagged that ring. It never became the Flickr of people, which was of course Facebook. It remained the Flickr of photos. At least, until Instagram came along.”